18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 121 the Court granted Plaintiffs’ motion for class certification of the state law claims and conditional certification of the FLSA claims. (v) Fifth Circuit Alvarez, et al. v. NES Global LLC, 2021 U.S. Dist. LEXIS 192782 (S.D. Tex. Oct. 6, 2021). Plaintiffs filed a collective action alleging that Defendant misclassified them as highly compensated employees (“HCEs”) exempt from the FLSA and thereby failed to pay overtime compensation. Plaintiffs previously had filed a motion for conditional certification of a collective action, which the Court granted. Defendant subsequently filed a motion for reconsideration of the Court’s ruling. Defendant argued that: (i) the Court misapplied the certification standard the Fifth Circuit recently established in Swales v. KLLM Transport Services, LLC, 985 F.3d 430 (5th Cir. 2021); and (ii) and that opt-in Plaintiff Hippler was not a proper member of the proposed collective action, since he was paid on an hourly, rather than daily, basis. The Court denied Defendant’s motion for reconsideration. Defendant compared the Court’s approach to conditional certification recently rejected by the Fifth Circuit in Swales . The Court disagreed with Defendant’s contention that the Court’s order was effectively an application of a rejected approach to certification discussed in Swales . The Court held that it upheld the necessary similarly-situated standard at the initial stage. The Court explained also that the Fifth Circuit’s holding supported the previous conclusion that putative collective action members are similarly-situated within the meaning of FLSA because the salary basis component of Defendant’s defense could be decided on a representative basis. Defendant also argued that the Court inappropriately addressed the merits of the case by adopting the view that the reasonable relationship test applied to the HCE function. Defendant asserted that the reasonable relationship test should not apply to the HCE exemption. The Court determined that since the Fifth Circuit definitively resolved this issue, Defendant’s argument was moot. Finally, Defendant asserted that Plaintiff’s counsel misrepresented Hippler’s payment structure, and that he was actually paid on an hourly, rather than daily basis, and accordingly was not a member of the proposed collective action consisting of day-rate workers. Plaintiff argued that in nearly every workday except for one, Hippler was either paid a $1,400 day rate, or paid an improper half-day deduction at $700. The Court opined that it would decline to reconsider the matter based on a single instance of a Plaintiff who may or may not be included in the collective action membership. Accordingly, the Court denied Defendant’s motion for reconsideration. Badon, et al. v. Preferred Caregivers & Sitters, LLC, 2021 U.S. Dist. LEXIS 146629 (E.D. La. Aug. 5, 2021). Plaintiff, a home health caregiver, filed a collective action alleging that Defendant misclassified caregivers as independent contractors and thereby failed to pay them overtime compensation in violation of the FLSA. Plaintiff filed a motion for conditional certification of a collective action, which the District Court denied. Plaintiff contended that Defendant was in reality the employer of all home health caregivers, as it controlled their pay, job schedules, job requirements, and barred them from working for any other caregiving service provider. The District Court denied the motion for conditional certification due to a recent ruling in the Fifth Circuit, which was now binding precedent, i.e. , Swales v. KLLM Transportation Services LLC, 985 F.3d 430 (5th Cir. 2021). In Swales , the Fifth Circuit articulated new principles to guide the consideration of conditional certification issues based on the "interpretive first principles" of the statute’s text and the Supreme Court’s leading case law precedents. The Fifth Circuit concluded that the FLSA requires that District Courts ensure "that notice goes out to those who are ‘similarly-situated,’ in a way that scrupulously avoids endorsing the merits of the case," District Courts should not forego "potentially dispositive, threshold matters" just because they also concerned the merits of the underlying claims. Id. Swales ruled that a District Court should identify, at the outset of the case, what facts and legal considerations will be material to determining whether a group of "employees" was "similarly- situated." Id . at *9. The Court ruled that the similarly-situated test here would require application of the economic-realities test, which would necessitate individual inquiries into the degree of control the employer exercised over each independent contractor. Id. The Court therefore held that limited discovery was required in order to determine whether conditional certification would be warranted in this matter. For these reasons, the Court denied Plaintiff’s motion for conditional certification of a collective action. Berridge, et al. v. Pediatric Home Healthcare, LLC, 2021 U.S. Dist. LEXIS 169720 (W.D. Tex. Sept. 8, 2021). Plaintiff, a home healthcare worker, filed a collective action alleging that Defendant failed to include bonus pay with regular pay in calculating the overtime compensation rate in violation of the FLSA. Plaintiff filed a motion for conditional certification of a collective action, and the Court denied the motion. Plaintiff sought